Panasonic confirmed in recent days that it has not locked in a deal yet with Tesla for its Chinese Gigafactory. Several Panasonic executives commented on the matter, noting that plans are “not solidified yet” and that “nothing is set in stone.” It’s unclear if that’s glass-half-full or glass-half-empty commentary, but the next line leads one to think it’s in the plans.

“Tesla could in the future launch full-fledged production in China — and we could produce jointly,” Panasonic CEO Kazuhiro Tsuga said on its recent earnings update.

The location of the new Tesla Gigafactory in China is expected to be confirmed by Tesla later this year, CEO Elon Musk noted on the recent shareholder conference call. It sounds as if talks with the Chinese government continue to progress in light of softer restrictions on foreign automakers operating in China.

Tesla and Panasonic have been strategic partners for several years, with Panasonic supplying the batteries for Tesla’s vehicles from its overseas factories and then jumping in bed together with the construction of Gigafactory 1 just outside Reno, Nevada. Panasonic is putting up nearly half of the total capital for Gigafactory 1, having already laid out $1.8 billion out of a total estimated cost of $5 billion.

The partnership with Tesla has the potential to scale up considerably over the coming years, with work already underway on Tesla’s second Gigafactory outside Buffalo, New York. The facility was originally built by SolarCity as a Solar Gigafactory, to produce high-efficiency solar panels, and has since been folded into the Tesla family with the addition of Tesla’s solar roof tile production through a new partnership with Panasonic. Battery production is expected to be added to the facility as well, with Tesla aiming to create all of its products under one roof at future gigafactories.

Panasonic is already seeing significant benefits from its battery cell business, announcing on its earnings call earlier this month that it expects battery cell sales to drive a significant increase of 11.7% in operating profits for the next year.

About the Author

Kyle Field I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. TSLA investor. Tesla referral link: http://ts.la/kyle623

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